Upheld: Other regulated complaint complaint against Mitsubishi HC Capital UK Plc
Financial Ombudsman decision DRN-6474015 of 2026-07-03T00:00:00+00:00. Other regulated complaint complaint against Mitsubishi HC Capital UK Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6474015 |
|---|---|
| Decision date | 2026-07-03T00:00:00+00:00 |
| Firm | Mitsubishi HC Capital UK Plc |
| Product | Personal loan |
| Claim type | Other regulated complaint |
| Outcome | Upheld |
| Remedy | The Lender must: (1) Refund all of Ms V's repayments under the Credit Agreement, including sums paid to settle the debt, and cancel any outstanding balance; (2) Refund annual management charges and the trade-in value of the trial membership; (3) Deduct the value of promotional giveaways used and the market value of holidays taken using Fractional Points (or alternatively, deduct annual management charges for years in which holidays were taken); (4) Add simple interest at 8% per annum to each net repayment from the date made until settlement; (5) Remove any adverse credit file information recorded within six years of the decision; (6) If membership is still in place, indemnify Ms V and Mr S against all ongoing liabilities provided they assign their Fractional Points to the Lender or hold them on trust for the Lender. |
Summary
Ms V and Mr S purchased Fractional Club membership (an asset-backed timeshare product) on 6 April 2018 for £19,725, financed through a credit agreement with Mitsubishi HC Capital UK Plc. The Fractional Club provided holiday rights and a share in the net sale proceeds of an Allocated Property after 19 years. Ms V complained that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and selling the membership as an investment, and that this rendered the credit relationship unfair under Section 140A of the Consumer Credit Act 1974. The ombudsman upheld the complaint, finding that the Supplier's training materials and sales practices led consumers to believe membership offered financial gains and property ownership benefits, which constituted marketing the product as an investment in breach of regulatory requirements. The ombudsman accepted Ms V's testimony that the prospect of financial gain was material to her purchasing decision. The Lender was directed to refund all repayments, management charges, and the trial membership trade-in value, with interest, and to remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that although the contemporaneous paperwork contained disclaimers stating Fractional Club membership was not sold as an investment, the Supplier's training materials and sales practices demonstrated that sales representatives were likely to have led consumers to believe membership offered financial gains. The training manual's emphasis on property ownership, 'money back' benefits, and the comparison between spending on holidays with 'no return' versus receiving a financial return after 19 years, when considered in context, amounted to marketing and selling the product as an investment. This breached Regulation 14(3) of the Timeshare Regulations. The ombudsman accepted Ms V's testimony that the prospect of financial gain was a material motivating factor in her purchasing decision, despite the statement being brief and produced years after the sale. The breach was therefore material to the credit relationship, rendering it unfair under Section 140A of the Consumer Credit Act 1974.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Mitsubishi HC Capital UK Plc, all decisions | 1,127 | 14% |
| Other regulated complaint, all decisions | 18,992 | 19% |
| Personal loan, all decisions | 22,885 | 29% |
Source
Read the original decision on the Financial Ombudsman Service website